APPROVED MINUTES

Department of Industrial Relations

Industrial Medical Council

Ramada Inn, South San Francisco

Thursday, July 18, 2002

Members present:

Barry Halote, Ph.D. Kenneth Sim, M.D.

Maria Mayoral, M.D. Patricia Sinnott, PT, MPH

Ira Monosson, M.D. Lawrence Tain, D.C.

Jonathan Ng, M.D., J.D. Paul E. Wakim, D.O.

Richard Pitts, D.O Gayle Walsh, D.C.

Michael Roback, M.D. Benjamin Yang, C.A. OMD

Members absent:

Robert Larsen, M.D. Glenn Ocker, DPM, MS

Steven Nagelberg, M.D. Richard Sommer, M.Phil., J.D.

1. The meeting was called to order by Co-Chair Dr. Richard Pitts.

2. Consent Agenda:

a. Adoption of the Minutes and Notice of Actions: Dr. Pitts asked for a motion on the Draft Minutes and Notice of Action of the June 20, 2002 IMC meeting. Ms. Patsi Sinnott noted a typographical error that will be corrected.

Action: The Consent Agenda was approved unanimously.

b. Executive Medical Director's Report:

Dr. Susan McKenzie indicated that her EMD report stands as written and has nothing further to add.

c. Legislative Report:

Mr. James Fisher indicated there is nothing to add to what is in the packet.

d. DWC Report:

Mr. Richard Gannon, Administrative Director, Division of Workers Comp. (DWC), said there was not much to report beyond what he had reported last month. He supports finishing the studies that the Lewin Group is doing.

Mr. Gannon gave an outline on what DWC anticipates the time line will be. Following the Lewin's report to the IMC Council in September, DWC will assimilate the information. They will start a discussion phase of rule making, and will have a plan for the public for input. DWC wants to wait to see the results before they start an open discussion. They will consider all public comments, over a lengthy period and if they don't get the budget augmentation, it will be much lengthier. DWC does not anticipate having rules in place at this time next year, summer of 2003. At the beginning of this discussion period, DWC will have a pretty clear idea on exactly what the problems are that they are attempting to resolve. Then, the public can comment on whether moving to RBRVS is the best and what the alternatives are. DWC will consider these comments and will also strongly consider the effort, which has been made so far to move to RBRVS. The burden is on parties to tell DWC why RBRVS is not the best alternative. DWC will listen to the comments, strongly consider them, and will ultimately go forward with the formal rule making proposal. They will hold formal public hearings and will post tentative rules before the hearings on their web sites. People will have the opportunity to comment. They will be able to see other people comments and comment on the comments.

Mr. Gannon has no pre-conceived ideas about moving to RBRVS; it started before he was appointed AD. It makes sense to him to move to RBRVS so far. That is why DWC is working together with the Industrial Medical Council staff and moving forward with this. Ultimately, they will come up with the revision. Probably it won't be before this time next year.

Mr. Gannon also clarified that he had not received any pressure, suggestions, or recommendations from anybody that he needs to make up the increase in injured workers' benefits by reducing medical cost or medical fees. He said that you would be amazed at the direction he gets from anybody, except from his staff. DWC is going about this based on logic. Some people have said to look at what the Governor said in prior veto messages; you have to offset the benefit increases. They want to make the system as efficient and practical as possible. The main thing DWC looked at to offset the increase is by adding new fee schedules. One area in which there had not been any regulations and that you see every time you pick up the paper is rising pharmaceutical costs. The other area is to encourage HCOs, which people believe introduced savings. The official medical fee schedule was not mentioned.

The Legislature undid two things that they thought would introduce savings into the system: the primary treating physician's presumption and baseball arbitration. They recognized the victory of the treating physician's presumption, which were anticipated, but didn't come to fruition. Rather than trying another reform scheme, they wait to study the system to find out why the non-indemnity sides of benefits are going up as fast as they are. It is not necessarily medical treatment and in Mr. Gannon's opinion, it's the fee schedule. People told him it had last been updated ten years ago with the exception of the adjustment on evaluation and management recently. The fee schedule is not the cause of cost going up and therefore, correcting it is not the solution. We need to find out what costs are going up, why they are going up and what can be done about it. That is what the medical study is designed to do. He does not anticipate in this process that he will get phone calls telling him what to do with it. When he first started, his only direction was from the presidents of some insurance companies that had been talking to the Governor and told him that the workers' comp. system, particularly the judicial system was broken and needed to be fixed. DWC did start looking at it by doing the judicial study. There are some changes in the supervision of the court in recent legislation and Mr. Gannon thinks it is going to be positive. He has not heard a word in three and half years since then. He can assure people that he is going to look at the issues and is concerned about actions. He always hears that people are not going to work under the system if you don't pay them sufficiently. He does not want to reduce access by setting fees too low. They are certainly open to any realistic comments about what fee changes will do to certain specialties and access. He has been told that they are going to face a Texas lawsuit scenario. He can relatively assure people that the State AFL/CIO will not be a party to a lawsuit as they were in Texas. There is an effort to provide quality treatment, fair reimbursements and access to care. The fee schedule will reflect this.

Dr. Paul Wakim thanked Mr. Gannon for his open mind approached in this matter. This certainly makes all in the providers' community feel better about approaching the matter of RBRVS. Their concern is not merely about the starting level of the RBRVS but about the consequences of reducing the percentages over the years to come when Mr. Gannon is not here. But nonetheless, Dr. Wakim is grateful to hear that Mr. Gannon is open to alternatives. Mr. Gannon mentioned something about encouraging HCOs' development in the State of California, but HCOs only cover around three percent of the number of injured workers. We have 90 million workers and 250,000 are covered by HCOs. So HCOs have not been proven to be the way to go. As for Mr. Gannon's open minded approach, Dr. Wakim thinks its the best approach and he is looking forward to seeing the community work with DWC in achieving something that is appropriate to the providers as well as to the injured workers and the insurers. Mr. Gannon responded that his tenure is also contingent on the upcoming election.

Dr. Michael Roback said that if you look on paper, people would probably not accept RBRVS, and maybe it is not even in his best interest. The cost and payment on reports are pretty reasonable. The inconsistencies and inefficiencies compared to other systems have made the costs so high and he thinks we do need to economize. We need to look at the causes of the costs and the problems that corporations now face. Unless we develop responsibility of all parties including the providers, it doesn't make any difference what fees are charged. Dr. Roback is hoping that it is part of the study to look at the inefficiencies outside and inside the provider's community. There is a potential loss of billions of dollars that have nothing to do with doctors.

Mr. Gannon said they tried a number of things to resolve problems on medical billing issues and disputes and they have not come up with the right answers. They are waiting for the community, payors and providers to get back to the table. They tried a pilot program for billing disputes, but nobody used it.

DWC will be significantly limited in funding. As far as dispute resolution, they are projecting right now that time to trial will be backed up where it was in 1988, 89-90, when the limitations on what they must do in the courts in time to hearings, settlement conferences, in expedited hearings were imposed because of the shortages.

Dr. Roback cited an article that has been written by CWCI about defense attorneys. He gave the example that an attorney who settles cases and should have authorization to settle the bills. The attorney often does not have authorization from the adjuster, however.

3. Education Committee Report:

Dr. Gayle Walsh reported that the Committee reviewed three providers' applications for continuing education courses: One new provider, Webility, a distance learning program with interactive computer program, for two and half hours; Two renewals: California Society of Industrial Medicine & Surgery (CSIMS) for 12 hours credit and Platto and Sosine for a 12 hours report writing program. The Committee recommended approval for these three providers.

Dr. Walsh: Motion: That the Council approve the applications of the above three providers for continuing education courses. The motion was seconded.

Action: Motion passed unanimously.

Dr. Walsh said that Mr. James Fisher put together an instruction sheet for providers to understand what the IMC Staff looked at when reviewing programs, how they are reviewed and what the Staff does to try to work with the different providers. This instruction sheet was sent out to the Council Members and also available to those who are interested to become providers.

Dr. Walsh also reported that the Committee talked about topics in the QME regulations that will be reviewed in the next few months. They had a discussion about retired and teaching physicians and how we need to define these categories so that the Staff will be able to process the few applications that we receive under this category. The Staff is going to review some information as requested and will get back next meeting to continue the discussion.

4. Ad Hoc Committee on Educational Statements:

Dr. Wakim announced that the Ad Hoc Educational Committee will have an open forum that will probably last for four to five hours regarding Fibromyalgia at 1:00 P.M. on September 19, 2002, in San Francisco. He extended invitations to all those who are interested.

5. Fee Schedule Committee Report

Dr. Susan McKenzie said that she is pleased to see so many people present today to hear the results of the Physician's Work Study. She said that the IMC is an advisory group to Mr. Gannon on the subject of medical reimbursement and on fee schedules. In this capacity, the IMC has undertaken three studies to look at the impact of moving to RBRVS and look at potentially customizing it for the California workers' compensation setting. The first of these studies was the initial impact analysis that the Lewin Group presented last fall. The Lewin Group will do another analysis when we have all the proposed changes and all the pieces of the puzzle together. The second study or sister study as it's called, for the first time ever, will look at the number of the issues in medical treatment that deal with the system of workers' compensation. The first of these is the Physician's Work Study, which will be presented today. It looks specifically at the question of whether the physician's work in workers' compensation in California is equal to, greater than, or less than physician's work in treating patient in other California payment setting. For example, disability management, return to work issues, medical-legal issues and all of the reporting and other administrative requirements that have to do with the workers' compensation system. We have gone to great lengths to try to include all of the eight physician groups and all of the important medical specialties in the workers' comp. system in this study. The second study, the Practice Expense Study, is well under way. We had panel meetings in the last several days, which were very informative. Mr. Ganon spoke to the probable timeline for these revisions, it took longer that it should but Dr. McKenzie thought that this is very realistic timeline. She said that its important to get all the pieces of the puzzle, to hear the results of all the studies and see all the proposed changes before we start making proposals about exactly what to do with the fee schedule. Dr. McKenzie then introduced the Lewin Group:

I. AUDIO/VISUAL PRESENTATION

The Relative Work Content of Evaluation and Management Codes:

The Physician Work Study

Presented by - The Lewin Group

Allen Dobson, Ph.D.

Joan Da Vanzo, PhD, NSW

Jawaria Gilani, MPH

II. Discussion Part:

The members of the public and the Council Members participated in the discussion part of the presentation.

Commenting on the Impact of Survey Results, Mr. Gannon said the numbers throughout are just based on the dollar value on the database. Workers' Comp. should at least have an increase of three percent that will actually compensate the work in workers' compensation as compared to the other payment system.

Council Meeting's Closed Session began at 11:55 a.m. The open session resumed at 12:25 p.m.

6. Discipline Committee Report:

The Council voted to accept the decision of the Administrative Law Judge regarding Sheridon Groves, M.D.

7. Announcements:

Dr. Pitts announced that there will be no meeting in August and the next meeting will be held on September 19, 2002 in South San Francisco. He again announced Dr. Wakim's Open-ended Committee Meeting regarding Fibromyalgia at 1:00 P.M, on September 19, 2002 in San Francisco.

10. Meeting adjourned at 12:30 p.m.

Thursday, July 18, 2002

IMC Staff presents:

Susan McKenzie, M.D., EMD James Fisher, Esq.

Anne Searcy, M.D. David Kizer, Esq.

Larry Williams Annadesa Gregorio

Mila Diadula Rainier Arenas

DWC Staff presents

Richard Gannon, Adm. Dir. Jackie Schauer, Esq.

George Parisotto Suzanne Honor

Glenn Shor

Members of the public presents:

Benita Gagne, Intercommunity Linda Coltrin, CCA

Bill Howe, CCA David Willat, D.C.

Rea Crane, CW Hans Lee

Peggy Sugarman, CAAA Diane Przepiorski

Carl Brakensiek, CSIMs Barry Adelman

C.L. Swezey, CHSWC Janet Jamieson, Medata

Steven Levine, M.D. Steven Feinberg, M.D.

Neil Smithlive, M.D. Sheri Nolen, HNC Software

Joseph Zammaro, OPSC Stacy Jones

Will Brown, Safeway Roberts Chiton, PHM

Reesin Wilkie, CMA Frank Navarro, CMA

Kim Wiswell, Kaiser Permanente

Sunny Sutton, Medforms

DISCUSSION ON THE LEWIN GROUP PRESENTATION

Commenting on the Impact of Survey Results

Mr. Gannon said the numbers through out there are just based on the dollar value on the database, workers' comp. should at least have an increase of three percent that will actually compensate the division to the work as compared to the payment system. Ultimately we will add to the worth of the practice expense and that will show this is the difference between the amount of time in as necessary workers' comp. as oppose to the other payments system and then we will have some sense on how to figure out some way of putting back in the fee schedule to reflect that.